Friends-
What do you make of this? I assume the refrence to Valence is to SK group, or is this a bigger mix-up?
Doesn't look like a re-packager. Says Valence role is due to their existing contacts in China. Hmmm...
Describas Valence Tech as a wholly-owned subsiderary of SRS Labs.
"With operations in Hong Kong and China, Valence Technology, the Company's wholly-owned subsidiary, is spearheading SRS Labs' penetration of the China market."
Comments, please-
Bob Childers
VALENCE TECHNOLOGY (NASDAQ: VLNC)
Quote, Profile, History, News, Chart, Zacks, MarketGuide, StockTalk
News April 27, 07:04 Eastern Time
SRS LABS ANNOUNCES RESULTS FOR FIRST QUARTER 1999 AND
Discusses Newly Expanded Business Strategy
SANTA ANA, Calif., April 27 /PRNewswire/ -- SRS Labs, Inc. (Nasdaq: SRSL), a leading provider of
complete audio and voice technology solutions, today announced financial results for the first fiscal
quarter of 1999.
For the three months ended March 31, 1999, the Company posted total revenues of $7,716,841 and
a net loss of $1,497,110, or $0.13 per share, on 11,681,419 weighted average shares outstanding.
For the comparable quarterly period ended March 31, 1998, the Company posted revenues of
$7,057,396, and a net loss of $18,210,934, or $1.68 per share, on 10,852,052 weighted average
shares outstanding.
Because the financial results of the first quarter of 1998 include the write-off of acquired in-process
research and development associated with acquisitions completed during the first quarter of 1998,
which totaled $18,510,378, and only two months of results from Valence Technology, acquired
during the first quarter of 1998, the consolidated results of 1999 are not comparable to SRS Labs'
results for the same year-earlier period.
The first quarter results reflect a continuing decline in licensing revenues from the personal
computer sector, the traditional seasonal first quarter slow-down in the Asian consumer electronics
marketplace and a number of non-recurring costs and year-end expenses. Among these
non-recurring expenses in the first quarter of Fiscal 1999 were costs related to the investigation and
pursuit of potential acquisitions which did not materialize and audit fees and other costs associated
with year end reporting for the Company's multi-national operations. Seasonal factors included
marketing costs associated with major tradeshows in the United States and the traditional slowing
of business during the Chinese New Year.
"The first quarter is not indicative of what we anticipate for the rest of the year," stated Thomas
Yuen, chairman and CEO of SRS Labs, "and I fully expect the Company's results from operations
will be significantly improved in the second quarter and beyond as we begin to realize cost savings
from streamlined operations and revenues from OEM agreements announced in the later half of
Fiscal 1998 and new product and business capabilities. At the same time, while PC price wars and
the financial uncertainty in Asia will continue, we feel that the impact of these factors on SRS Labs
has essentially bottomed out and we are commencing a fresh start with a more diversified revenue
base, streamlined organization and a new product marketing orientation."
Yuen cited a vastly expanded portfolio of sound and voice technologies as well as new
manufacturing and marketing processes in place as factors underlying his confidence. "We are no
longer dependent on one or two technologies and we are beginning to see tangible returns from our
investments in new sound enhancement technologies for consumer and professional audio markets,
such as TruSurround and SRS Headphone. We are also beginning to see tangible results from
CircleSurround, WOW and TruBass, three new technologies launched in January 1999 at the
world's largest electronics show, CES," Yuen said.
***VLNC***
*** With operations in Hong Kong and China, Valence Technology, the Company's wholly-owned
subsidiary, is spearheading SRS Labs' penetration of the China market where the Company has
rapidly gained a strong position. Yuen noted, "We are encouraged that our technologies are being
enthusiastically received and that our efforts over the past year have resulted in licensing
relationships with more than fifty of the region's leading electronics product manufacturers. This
quarter, we saw the beginning signs of the positive results of these relationships and anticipate that
the financial benefits will continue to grow."
Yuen continued, "Voice technology is a new and exciting market for us made possible by our 1998
acquisition of VIP, Voice Intelligibility Processor technology, which improves the clarity of spoken
words especially in environments with a high level of noise. During the first quarter of Fiscal 1999,
we are very pleased that we made significant inroads into the telecommunications industry by
securing a future revenue stream from VIP through our announced OEM agreements with Lucent
Technologies and Samsung Electronics."
To maximize the Company's new technologies and increased product capabilities, the efforts of the
Company's worldwide sales organization have been re-focused to concentrate on these new high
margin opportunities. In the coming months, the Company also is scheduled to launch an
aggressive E-Commerce strategy and an enhanced website with emphasis on marketing
SRS-branded sound accessories and software, as well as promoting the SRS brand name on the
Internet.
"The ability to deploy a diversified business strategy based on multiple growth markets, technology
packages and distribution channels is derived from acquisitions made by SRS Labs in 1998," Yuen
noted, "and we anticipate that we will begin to reap the benefits in the second quarter. We have a
clear picture of where we are going and are confident that as we report on our progress over the next
several quarters, our investors will share our enthusiasm. We remain committed to our primary
objective of enhancing long-term shareholder value."
About SRS Labs, Inc.
SRS Labs is a leading provider of audio and voice enhancement
technology solutions. SRS Labs' business consists of licensing
technologies to manufacturers of consumer electronics, computer, game
and telecommunications equipment, and the design, manufacture and
distribution of components, integrated circuits, sub-assemblies and
finished products for the consumer electronics and home entertainment
markets. For more information on SRS Labs' technologies, the company's
worldwide licensing program or its design and manufacturing
capabilities, visit the SRS Labs website at srslabs.com.
SRS, the SRS symbol, TruSurround, VIP and CircleSurround are registered trademarks of SRS
Labs, Inc. in the United States and selected foreign countries. WOW Thing, TruBass and SRS
Headphone are trademarks of SRS Labs, Inc. All other brand names mentioned are trademarks or
registered trademarks of their respective holders.
Except for historical information contained herein, each of the statements of Mr. Yuen in this
release and those of the Company are forward-looking statements and projections (including
statements concerning plans and objectives of management for future operations) that are based on
management's belief, as well as assumptions made by, and information currently available to,
management.
While the Company believes that its expectations are based upon reasonable assumptions, there
can be no assurances that these forward-looking statements or the Company's financial goals will
be realized. Numerous factors may affect the Company's actual results and may cause results to
differ materially from those expressed in forward-looking statements made by or on behalf of the
Company. For example, results may be affected by (a) the ability of the Company to (i) modify its
business strategy to be a product innovator, (ii) execute its business strategy in Asia, particularly in
China, and (iii) obtain necessary resources to timely and cost effectively bring SRS
technology-based components to the market; and (b) acceptance by the Company's customers and
consumers of the product offerings and technologies offered by the Company. Additional factors
which may affect results expressed in forward looking statements include the acceptance of new
products and technologies related to VIP, Circle Surround and other Company technologies, the
impact of competitive products and pricing, the timely development and release of products by
suppliers and licensees of the Company, general business and economic conditions, particularly in
Asia, and other factors detailed in the Company's Form 10-K for Fiscal 1998 and other reports filed
with the SEC. |
